Tesla seeks traction upstate

Bill would allow more company stores

Published 8:04 pm, Monday, June 5, 2017

Albany

In 2014 Tesla Motors, which sells its electric cars through a system of company-owned stores, clashed with independent franchisees or auto dealers in the state Legislature. The result was a compromise in which Tesla was allowed five stores, all of which are in the Greater New York City area or Long Island.

Now Tesla is looking to expand upstate, including the Capital Region, and Assembly Democratic Majority Speaker Joe Morelle of Rochester has a bill that would allow that.

Morelle's recently introduced bill would raise the number of Tesla stores allowed in New York from five to 20. And five of the new stores would go upstate, probably in the Hudson Valley and Capital Region as well as the Syracuse, Rochester and Buffalo markets.

"What happened three years ago was an unnatural constraint on our ability to grow," Tesla's Vice President of Business Development Diarmuid O'Connell said during a phone conference on Monday afternoon. He was referring to the cap of five stores — which was settled on amid pushback by traditional auto dealers.

Unlike Tesla, which operates its own stores, other vehicles are sold through independently owned dealers who have franchises with automakers such as the Big Three and imports.

Dealers have maintained that their system helps maintain price competition since they compete with each other, even if they are selling the same brand. They also said having a manufacturer's store could cost jobs.

O'Connell said there haven't been job losses as the result of the five Tesla stores that are downstate.

The push comes as Tesla is preparing to manufacture an approximately $30,000 model, which is considerably less than their other offerings which start at around $70,000.

It also comes after Tesla back in November acquired the SolarCity solar panel company. SolarCity is building a large state-subsidized solar panel factory in Buffalo that is part of Gov. Andrew Cuomo's "Buffalo Billion" initiative to restore the western New York economy.

When asked if moving forward on Solar City was tied in any way to increased automobile stores, O'Connell said "We're not exploring trade-offs per se but if we are going to be successful in New York it's going to be driven to a large degree by how well we can penetrate the market."

Tesla officials said GOP Sen. George Amedore has expressed interest in sponsoring the measure.